00:00We've talked about this sort of high on pageantry, low on deliverables, and we've been through
00:05a few of these leadership sort of events to date, right?
00:08And it's never a sense that any big surprise deliverables will come through, but it feels
00:13like even the low-hanging fruit may not necessarily be in play for this trip.
00:20Thanks, Heidi.
00:21Yeah, that's exactly right.
00:23You know, in seeing some of the images go past on the screen a couple of minutes ago,
00:28it makes me think we really should think of this summit that's going on right now in Washington
00:32as a pageant that's going on as the two leaders try to paper over some of these big systemic
00:39differences over rare earths, over trade and tariffs, over fentanyl, over a whole lot of
00:45other things, AI distillation attacks.
00:49And the optics have really been quite striking, but it sort of is like a Christmas present
00:54that's wrapped up in shiny paper with lots of bows, and then you open it up.
00:58And there's nothing inside, or worse yet, there's a lump of coal.
01:02And so the day has been filled with so much pageantry that there hasn't even been all that
01:07much time for the two presidents to sit down and work out their differences.
01:12And I actually think that's by design.
01:15Any real work that happened was a couple of days ago in New York.
01:19But the two sides, the two presidents are clearly ready for a little bit of break in the tensions
01:26and the appearance of calm, just sort of a break so that they can have a couple more months of
01:32calm.
01:34There were already enough red lines before we, back in May, right, where they met in Beijing.
01:40And a lot of that focuses on rare earth access, as well as the sort of tech tensions as well.
01:46The tech tensions aspect has just built as a further flashpoint with AI.
01:50Was it interesting to you that President Trump and President Xi seem to have differing views on how AI safety
01:57should be dealt with? And does that mean we're going to see possibly more bifurcation than consensus
02:01in terms of being able to come together for any kind of framework?
02:08Yeah, it's really been quite striking how over even the last few days or week or so,
02:13both sides, Beijing, Xi Jinping in Beijing and Trump in Washington,
02:19have repudiated these notions that there should be a pause or that the two sides can kind of come together
02:26and agree that this AI development should slow down. Both sides have rejected that view.
02:33You know, the Chinese Ministry of State Security was outwriting their own views on what they call
02:39AI security. And what they mean by that is really securing the Chinese Communist Party regime.
02:45Whereas in the U.S., the debate is more about, you know, catastrophic risks,
02:50biorisks and all the rest. And Trump, of course, has rejected the notion
02:55that the labs should all put things on pause while they figure that out. And so I think that explains,
03:01you know, the two sides are really quite far apart. They don't have a lot of common interests here.
03:06And I think that's why all you've seen so far on the AI deliverables are baby steps. They've announced
03:13once again that they're going to have an AI dialogue that's a recycled announcement from the summit
03:18in May. And they've also, the U.S. has put out a proposal for a so-called AI notification mechanism.
03:24You can think of this sort of like a hotline where the U.S. government is saying,
03:28let's give each other a heads up, maybe send an email or even a fax if there's something going on,
03:33if an AI model climbs out of its sandbox and is about to do something disastrous.
03:38So that's, you know, that's a positive, very small first step, but it really is just a baby step.
03:46The other interesting thing out of, you know, the limited information we have over the interactions
03:52between the two leaders is this request from presidency for Washington to oppose Taiwan
03:57independence, right? We don't know how President Trump reacted. I guess give me your thoughts on this,
04:03because even a change in semantics would be really striking and significant here.
04:10That's right. I think Xi Jinping is continuing to build on what he likely felt was a bit of progress
04:18he made in May, putting his talking points and kind of trying to program President Trump's brain
04:25to think in terms of, hey, Mr. President, let's you and I, Xi Jinping and Donald Trump,
04:31solve this Taiwan crisis together. I think it's a subtle way to seed in the American president's
04:39mind that Taiwan, Taiwan, this democracy of 23 million people that's the center of technology supply
04:46chains, maybe shouldn't even have a voice in this discussion, which is a ridiculous idea.
04:52So I don't think Xi Jinping is probably going to push very hard, but I think he just wants to
04:58kind
04:58of keep chipping away at that notion and build on that and get Trump to start thinking in these terms.
05:05Now, I do believe that President Trump is very well briefed by his team on this. They're going to be
05:11trying to prep him not to fall into these traps. And so I'm not expecting any major sea change here.
05:19Nonetheless, Xi Jinping is playing the long game.
05:24When it comes to the other pressure points that we know President Trump and his administration are
05:29facing, obviously wars on multiple fronts, there had been some pretty tough talk on wanting to get
05:34Beijing's help in terms of what it can do to influence Iran, what it can do in terms of its
05:39relationship and friendship with Vladimir Putin as well. Do you think those conversations are
05:43happening or has there been a step back and kind of more pragmatic management of expectations on what
05:49they can see Beijing doing here? Yeah, certainly Iran, we know at least, has already come up. The
05:57Chinese have put out public statements reiterating their own familiar talking points. They want the
06:03U.S. and Iran to go back to the MOU from a few months ago. They want tensions to cool
06:08down.
06:09Nonetheless, I don't expect Xi Jinping to go out of his way at all to help President Trump. I think
06:16the best we can hope for is that he doesn't escalate his support for the Iranian regime even more.
06:26We know that Chinese companies have provided satellite imagery that the Iranians have used to
06:32target and kill American service members. We know that the Chinese are supplying components to
06:38Iranian drones. It doesn't look like Xi Jinping is going to go out of his way to stop any of
06:45that
06:45or to offer real material assistance to Trump. He's going to kind of sit back and enjoy watching
06:52the Trump administration struggle with the situation. The struggles domestically are interesting,
06:59right? We have heard from China hawks in the administration and on the other side of the aisle
07:03as well. There's a situation at the moment with these F-35 plane parts. The visuals, you can
07:10understand, probably don't look great from a domestic point of view, right? Do you think that's
07:14pressure that President Trump is under at the moment?
07:19Yeah, certainly. I mean, I think that is part of the explanation why you have this very high-on-optics
07:26summit. It's a bit of a distraction for both sides from these very hard problems that both leaders
07:32are grappling with. It's all of the ones that you mentioned for President Trump. President Xi's
07:39problems are perhaps more subtle, but I think they're ultimately more serious. It's the structural
07:45problems with the Chinese economy and the signs of long-term weakness in Chinese economy just keep
07:51coming. So I think that helps explain perhaps why Xi Jinping isn't doing more to kind of twist the
07:58knife on the United States on rare earths. Xi Jinping also needs some pressure relief so that he can
08:05take care of his economic problems at home and continue pursuing his goals there. So even though
08:13Beijing still has this leverage over the United States, control over most of the supply of rare earths,
08:19they're not twisting it as much as they could be. And I think that is a indicator that he's feeling,
08:26Xi Jinping that is, is feeling a little bit more on the back foot than he did back in May
08:32when Trump
08:33traveled to Beijing to visit him. Let me end on some of the analogies we were bringing out earlier,
08:39the Christmas present, the pageant, right? Who wins this pageant, do you think? Does anyone end up
08:45with the lump of coal? Yeah, well, I think I would say that America has this crisis around rare earths.
08:56China has this long-term condition, this weakness in their economy. So I think the crisis around rare
09:03earths that America faces is ultimately solvable. It takes a lot of hard work. It could take years.
09:10So America needs determination and political will and to kind of keep at it. But it is a solvable
09:16problem. China, on the other hand, it's not clear to me that their economic problems are solvable.
09:23The economic miracle growth is over. So if I had to choose which country's problems I would deal with,
09:30I would still take America's over China's.
